Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.

“Only
federal employees, who have been screened and vetted through the Internal
Revenue Service, should be permitted to represent the federal government in
matters pertaining to individual taxes.”

* JK Lasser’s ASK JK feature provides a reader with the correct answer, but probably not the one
the poser is hoping for, to a good question.

“I inherited an annuity from my cousin. He
paid $100,000 but it was worth $109,000 when he died. Is this taxable to me?

Sorry about your personal loss. The inheritance isn’t
taxable, but receiving funds from the annuity is because your cousin never paid
tax on this income. Sounds confusing, but it’s the same thing when inheriting
an IRA—receiving the inheritance isn’t taxable but when distributions from the
account are taken, the distributions become taxable. Unlike property that gets
a stepped-up basis when the owner dies so that appreciation is never taxed,
there is no similar rule for ordinary income; it remains taxable to heirs and
beneficiaries.”

Distributions from
these kinds of inherited investments, including IRAs, are taxed to the
beneficiary the same way they would have been taxed to the deceased if they had
been taken prior to passing.

“In April 2013, while continuing to work on the
audit, the IRS revenue agent requested that Calcione and his ex-wife sign a
consent form to extend the time to assess their taxes. Calcione signed the
form, but his ex-wife did not. On July 12, 2013, the revenue agent left a voice
mail message for Andrew Calcione asking about the status of the executed form.

Three days later, the revenue agent received two voice
mail messages from Calcione. In the first message, Calcione allegedly
threatened that if the agent called him again, he would show up at the agent’s
home and torture him, rape and kill his wife and injure his daughter while the
agent watched, before killing the agent. A second message left by Calcione
requested the agent to disregard the first message, which Calcione said was
left in error.

Knowingly and intentionally threaten to assault and
murder an IRS revenue agent with intent to interfere with the official in the
performance of official duties, and knowingly and intentionally threaten to
assault and murder a member of the immediate family of an IRS revenue agent are
each punishable by statutory penalties of up to 10 years in federal prison and
a fine of up to $250,000.”

* ONLINE ACCOUNTING
DEGREE PROGRAMS has an “infographic” on “Taxes Around the World” with some
interesting “info”.

Form 5498 is an information
form only.It is not a correction of
previously reported information - and it is not late.You do not have to file an amended return, or
necessarily mail it to your tax pro.

* The following
statement appears on the NJ Division of Taxation website on the “homepage” for
the Homestead Benefit Program (the internal highlight is mine) –

“2012
Homestead Benefit. The filing
deadline for 2012 Homestead Benefit Applications was January 31, 2014.
Eligibility requirements and benefit amounts for 2012 will not be finalized
until the completion of the State Budget for FY 2015, which must be adopted by
July 1, 2014. Homestead benefits for
2012 are expected to be applied to May 2015 property tax bills.
Additional information on the 2012 homestead benefit will be posted when it
becomes available.”

* And while we are
talking about NJ property tax relief programs –

“Gov. Chris Christie is expanding access to
tax relief for New Jersey residents by extending the filing deadline for
applications to the Senior Freeze (Property Tax Reimbursement Program) to Sept.
15, 2014.”

Each year the
initial deadline for the PTR applications is announced as June 1st
(or, as was the case this year, June 2nd).And each year the cafones in Trenton
eventually extend the deadline to October 15 or 31.Why don’t the idiots just make the original
deadline October 15?

I expect the reason
is so that the governor can look like a hero by deciding to extend the deadline
so no senior or disabled homeowners miss out on the reimbursement.

* Before leaving
New Jersey – the NJ chapter of the National Association of Tax Professionals
has released its schedule of CPE for tax preparers for the rest of the year.Click here to view the offerings.

NJNATP, of which I
was a founding member, is celebrating its 25th “birthday” in 2014 –
and will hold a special “Night to Remember” on the evening before its October 2nd
Annual Conference.

The chapter’s
annual “Famous State Tax Seminar” will be held on January 10, 2015.This is a “must-attend” seminar for all tax
pros who prepare NJ state payroll and income tax returns.

* Over at GETTING YOUR
FINANCIAL DUCKS IN A ROW, Jim Blankenship continues his series on “Mechanics of
401(k) Plans” with a post on “Distribution”.

* KIPLINGER.COM
provides an excellent article by Susan B Garland highlighting the importance of
proper tax planning when deciding where and when to take money from various
tax-deferred, tax-exempt, and current, or “taxable”, accounts during retirement,
reminding retirees to “Tap Your Portfolio With Taxes in Mind”.

“Does the United States Constitution prohibit
a state from taxing all the income of its residents — wherever earned — by
mandating a credit for taxes paid on income earned in other states?”

* According to
Jason Dinesen, and similar to the case with many NJ state tax returns for
married couples but perhaps more so, it is “more better” for two income spouses
to file separate Iowa state income tax returns.

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